Nobody can make money on social network ads. Even Google (which controls a lot of the inventory on MySpace) is having a hard time. How worthless are these ads? Lookery, an ad network for social apps on Facebook and elsewhere, is renewing a promotion, guaranteeing 15 cents per thousand page impressions to app developers who sign up. With two ads per page, that comes to 7.5 cents per thousand ad impressions (CPMs). Back in January, Lookery was offering 12.5 cents per ad impression. So that means Lookery has cut its ad rates nearly in half.
Other social app ad networks, such as Social Media, are commanding CPM ad rates of around 50 cents by focusing on higher-quality inventory. Lookery is not so picky, and thus is probably more reflective of the what the majority of Facebook apps can expect to get (85 percent of its inventory is from Facebook).
Promoting a guarantee to starving app developers who have no other options is working for Lookery. When it offered its first guarantee in January, it was serving 140 million ad impressions per month. Now it is serving about three billion per month. (Social Media serves two billion).
Lookery is hoping all of those pennies will add up, but it isn’t counting on it. CEO Scott Rafer says the ad network is running at break even in terms of gross profits. But his plan is to use it to “bootstrap a data services business.” To that end, he is beginning to collect age and gender audience metrics from all the publishers in the Lookery network. For instance, the Facebook app Friendzii (which seems like it is geared towards people with no friends who are hoping to meet some) is actually most popular among 35-to-44-year olds.
If Lookery can’t sell ads to marketers, maybe it can sell the data.